In a dramatic escalation of its financial woes, Merit Street Media, founded by television personality Dr. Phil McGraw, is now embroiled in a high-stakes legal battle with its former distribution partner, Trinity Broadcasting Network (TBN). On Tuesday, TBN filed a lawsuit in Texas federal court, accusing McGraw of fraud and breach of contract under a $500 million, 10-year deal. The Christian television network alleges that McGraw failed to deliver a single episode of his flagship talk show, Dr. Phil Primetime, despite promises of 160 new episodes according to a report from The Hollywood Reporter.
The lawsuit paints a picture of a soured partnership that began in 2022 when McGraw approached TBN to replace CBS as his production and distribution partner. TBN claims McGraw made bold promises, including slashing the show’s $68 million annual production costs by 40 percent by relocating to Texas and terminating unionized employees. He also allegedly assured TBN that he owned the rights to the Dr. Phil series, that CBS had sold out its advertising inventory, and that he would produce new, 90-minute episodes. To seal the deal, McGraw reportedly demanded a $20 million “good faith” payment to his production company, Peteski, warning that CBS had offered him $75 million annually, and anything less would be a “deal killer.”
However, TBN alleges that McGraw failed to deliver on these promises. The network claims it invested over $100 million by June, including up to $13 million monthly in production costs, only for McGraw to produce no episodes. TBN further accuses McGraw of hiring dozens of Dr. Phil employees despite agreeing to cut costs by using local, non-unionized workers. Additionally, he allegedly refused to provide old episodes of his show or make a $9 million payment for Peteski’s 30 percent stake in Merit Street. Instead, TBN says McGraw demanded $100 million for a 50 percent interest in the Dr. Phil media library and pushed Merit Street into costly distribution deals with associates like Steve Harvey, Nancy Grace, and Chris Harrison.
The relationship deteriorated further when McGraw allegedly orchestrated a “gangster move” to dilute TBN’s stake in Merit Street from 70 percent to 30 percent, promising lucrative investments at a $425 million valuation that never materialized. TBN claims it was blindsided by Merit Street’s Chapter 11 bankruptcy filing in July, which it says lacked board approval. The network accuses McGraw of plundering Merit Street’s assets and plotting to transfer the Dr. Phil license to his new venture, Envoy Media.
Merit Street, meanwhile, is countersuing TBN, alleging the network failed to secure national distribution and abused its power as a controlling shareholder. Merit Street claims TBN forced it into expensive distribution deals, leased its studios for McGraw’s shows at inflated rates, and provided subpar production services. The bankruptcy court has described the dispute as anything but “routine,” noting that McGraw conditioned a loan to Merit Street on winning its lawsuit against TBN.
TBN’s lawsuit seeks a court order clarifying both companies’ rights and obligations, as well as a ruling that McGraw agreed to provide his library of old Dr. Phil episodes as part of Peteski’s stake in Merit Street. As the legal battle unfolds, the future of Merit Street Media and McGraw’s television empire hangs in the balance, with both sides digging in for a contentious fight.
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